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14 March, 2011
In April, the National Union of Metalworkers of South Africa (NUMSA) will begin searching for union members in the metals and engineering sector who retired between 1980 and 2001. The reason is that NUMSA last month won a long-running battle through arbitration with South Africa’s Steel and Engineering Industry Federation.
The arbitrated judgement is an award for R20 billion (€209 million, US$290 million) in surplus pension funds that had been withheld by the employers’ federation for decades.
NUMSA fought in court and through negotiation channels for the right to disburse the surplus entitlement funds. The money was accumulated in both the Engineering Industries Pension Fund and the Metal Industries Provident Fund since the 1950s.
The surplus was accumulated and held when worker contributions to the funds were never paid out to staff who had not reached the vesting scale of ten years employment, or when NUMSA members failed to claim pensions when they retired or resigned. ICEM-affiliated NUMSA began battling for disbursement in 2001, but the case was not resolved because employers imposed many legal entanglements to block any disbursement.
The Steel and Engineering Industry Federation insisted that South Africa’s Labour Relations Act (LRA) apply in settling the issue. NUMSA and the Financial Services Board argued that surplus monies should come under the Pension Fund Act because the LRA had no provision for addressing pension issues. Finally, in 2008, the LRA was amended to address pensions and the two sides began negotiations. It was resolved in February through arbitration in the union’s favour.
Some 1.5 million former and current NUMSA members will now benefit. A total of R11 billion (€115 million, US$160 million) will be paid out to former or retired members, while R9 billion (€94 million, US$130 million) will go into existing funds to buoy those funds for the benefit of current NUMSA members.
Said NUMSA National Benefits Coordinator Samuel Tsiane, “Now it becomes our task to locate former members to deliver what belongs to them.” Tsiane said a small part of the pay-out will go to the union to achieve this and in April, NUMSA will utilise 450 people to conduct an initial ten-day blitz to identify retired or former metal or engineering staff. The pay-outs are expected to start being made in September.